Apple Watch Series 1 won't pair (watchOS 6.1.3)

Hi all, my wife’s AppleWatch (series 1) and iPhone 7+ will not pair. We get past the point your camera at the starry screen picture and then am stuck where the phone says “watchOS 6.1.3; Your software is up to date” and the watch shows either “Please continue setup on iPhone” or the circular screen shown below.

I’ve tried factory reseting the watch, turning it on and off, resetting the iPhone. Google didn’t yield much either. Any thoughts?